Centra Bank of Nigeria (CBN) is set to unify multiple exchange rates by allowing the naira weaken to a record low against the dollar on the official market on Friday, according to Reports.
Having traded within a band of 380 and 381 to the dollar since July last year, the naira hit a record low of 419.75 against the dollar on Friday. It then closed at 411.25 — the last closing rate for the naira on the over-the-counter spot market.
The move by the apex bank is one of the first indications of exchange rate harmonisation and tactical devaluation of the naira.
The policy shift also confirmed longtime speculation that the Nigerian Autonomous Foreign Exchange Rate (NAFEX) also called the Investors’ and Exporters’ Forex Window is the default official rate.
The apex bank had last adjusted the official exchange rate in August 2020 to N379/$1. The exchange rate displayed on the website has historically been referenced as the official exchange rate even as multiple exchange rate regimes have for years dominated the forex market.
However, all government transactions since 2021 have been converted, using the prevailing exchange rate at the official NAFEX window.
The CBN had last November devalued the naira by N6/$1 across all exchange rate lines in line with the exchange rate unification agenda of the apex bank as recommended by the International Monetary Fund (IMF) and World Bank.